Taiwan’s Financial Supervision Commission (FSC) has unveiled plans to allow banks to spend Stablecoins as part of an extensive regulatory framework for virtual asseters (VASPs).
The draft drawing, expected in June, is intended to set up Stablecoins as a bridge between the new Taiwan Dollar (TWD) and digital currencies, according to local media reports.
The move is part of Taiwan’s continuous efforts to integrate digital assets within the traditional banking system.
Double benefits
FSC chairman Kung Chin-Lung emphasized the importance of stablecoins in promoting seamless virtual activatransactions. These digital assets, usually linked to Fiat -Malutas such as the US Dollar of TWD, are designed to offer stability in a very volatile market.
The regulator also stated that Stablecoins investors allows a safe access point in the Taiwan’s growing market for digital assets.
Stablecoins offer double benefits: market volatility security and making fast, cheap cross -border transactions possible. Investors often use stablecoins to convert volatile cryptocurrencies into more stable assets or as a temporary measure before they re -enter the market.
Bankbureau director Chuang HSIU-Yuan noted that existing Stablecoins work without regulatory supervision and depend on the claims of Empendent about Fiat Reserve support. According to the proposed regulations, all Stablecoins FSC approval issued in Taiwan would need, and issuers and reserve managers would be subject to strict requirements.
Defining Stablecoins from CBDCs
The FSC emphasized that the development of the Stablecoin would entail close coordination with the Central Bank of Taiwan to tackle issues related to monetary policy and financial stability.
Stablecoins, who are privately issued and connected to Fiat currencies, differences from Central Bank Digital Currencies (CBDCs), which are supported digital versions of legal tender by the State. To prevent confusion, the FSC is planning to clearly define the roles of Stablecoins and CBDCs in its regulatory framework.
Taiwan’s decision corresponds to international efforts to regulate Stablecoins and to guarantee their integration into financial systems. Although their primary function is within digital ecosystems, Stablecoins are increasingly being seen as an aid for regular financial innovation.
